If you struggle to cover your monthly expenses, payday loans are a great way to get a short-term cash advance. Nonetheless, failure to repay the loan on time could result in a payday loan court summons. This can be quite a stressful situation to find yourself in, so you should do everything you can to avoid it.
Luckily, our team can provide the essential details on what court cases for failed repayment usually entail. Also, we’ll tell you exactly what to do in case collectors try to take you to court or you receive a legal complaint regarding failure to repay your payday loan debt on time.
How Court Summons for Cash Advances Works
Failure to repay on time not only results in hardship for you but for the payday lender as well. The truth is nobody wishes to pay for the high expenses of going through court trials, especially for low-limit payday loans.
So, the real danger isn’t posed by the payday lenders—it’s posed by the debt collector that will take on your debt to sue you in court. Luckily, lenders can only take you to civil court.
Still, here’s how the entire procedure works in case you end up being sued for defaulting on a loan:
- Your lender will contact you if you fail to repay
- If you can’t reach repayment terms with lenders, your debt is sold to a debt collector
- The collector will file an attorney letter
- Further failure to repay can result in a lawsuit
- The settlement will be arranged in civil court
So, chances that you will go to jail are low; however, you should always take action to prevent the possibility. In addition, note that getting another payday loan to settle your debt should be avoided as it will further increase your financial troubles.
Avoiding the Lawsuit Against Payday Lenders
Neglecting to pay back your loan amount to payday lenders on time can result in lawsuits, but it can be avoided with a few tips.
First, you need to know that payday lenders are not always responsible for lawsuits. So, as long as your case doesn’t reach the debt collector, you should be able to re-negotiate repayment terms.
Second, remember that you can use our service to access a list of lenders that will gladly provide you with a longer time frame for returning the loan. After all, it’s best to go with lenders that give you up to 90 days to return the loan, rather than just one month.
Third, inquire about repayment negotiations terms before you apply for the loan. Also, it’s always best to choose lenders that agree on longer repayment periods, even if you think that you can repay early. Doing so can help you get the opportunity to repay early without an additional fee. Still, you can get a longer window for returning the loan amount in other scenarios.
Our team offers a free consultation, as we’ll give our best to provide you with the fairest lenders with negotiable terms.
What to Do in Case of Court Summons
An unpaid payday loan can result in a court case against you if it reaches the debt collector. If this happens, you should take the necessary steps to reduce the possible consequences. If the collectors take you to court, you need to know exactly how to react, and our team will help you with that!
Follow these simple steps for coping with the lawsuits without taking any debt consolidation loans:
Go Through the Details
Even without the help of your lawyer, you can read the court summons and see if the summons is accordant to your loan repayment. It’s always best to thoroughly go over the details before making a move towards responding.
Unfortunately, at this point, you would perhaps have to pay additional attorney fees to get legal consultation. Still, if everything is according to the loan amount borrowed and the repayment details, you can work your way to the next step.
Try to Cover Your Payday Loan Debt Before Going to Court
It’s not too late to try to cover at least a part of your debt before going to court. You should file a reply to the court summons with the help of your lawyer, or you can do it yourself carefully. Either way, you can stress your financial hardship and offer to pay for a portion of your debt.
Most collectors will settle for a loan agreement if you can cover a part of your loan before the court hearing. Of course, you would also have to quickly find a way to collect the funds for the rest of the loan amount, but at least you will have higher chances to avoid court fees.
Know Your Rights to Use Against Collectors
Let’s face it—we all know how tiresome collectors can be when demanding your payout. As they take over your debt, you could receive countless calls throughout the day; however, knowing your rights could turn the situation to your advantage.
Namely, the law states that collectors cannot disturb you with calls after 9 P.M. or threaten you with any criminal court charges. Thus, you can use this against them with an accordant lawyer if these instances occur.
Getting help from a lawyer can help your case significantly, especially one that specializes in debt collection.
Final Resorts Against Lawsuits
If it seems like you’ll lose the case, you could refer to your bankruptcy attorney—if you announce bankruptcy, your debt will be discharged. Nonetheless, declaring bankruptcy can severely hurt your credit score and ability to get loans in the future. This option should be used only as the final resort, in cases where you didn’t get the loan shortly before announcing bankruptcy.
Additionally, you can consider wage garnishment. It’s a form of a payment plan proposed by the court that includes taking a portion of your wages for a certain period to repay the loan. If you garnish your wages, at least you won’t face any further court verdicts against your favor. That’s why it’s best to consider all of these scenarios before getting payday loans, regardless of their worth.
Final Thoughts
First, ultimately, there are some consumer protections you can obtain while taking loans from lenders. Second, it’s always best to get a loan from a lender that allows you to renegotiate the terms and repayment dates. Third, using another loan to repay for an existing one only triggers and worsens the debt cycle.
Hopefully, this guide has provided you with valuable knowledge on how to prevent the negative consequences of defaulting on a loan and what to do in case of a court summons.
FAQ
What Are the Consequences of Not Paying a Payday Loan?
Some of the consequences of not paying back a payday loan include higher interest rates, additional late charges and penalty fees, your loan being sold to a debt collector, and a court summons. Although it’s unlikely that you’ll get sued or go to jail, it’s possible for the court to garnish your wages or render you unable to get further loans.
Can You Be Sued for Not Paying a Payday Loan?
It’s possible to get a legal complaint regarding a failure to repay the loan on time. If collectors take your debt, you could end up being sued, but it’s impossible to get criminal court charges for this offense.
What If a Payday Company Sues You?
Payday loan companies could sue you for being unable to repay on time. Still, if you’re on benefits or using the loan to pay for medical bills, you could rearrange the repayment dates.
What Happens If a Loan Company Takes You to Court?
If a loan company takes you to court, you may receive judgment to garnish your wages, pay high court fees, and experience a negative reflection on your credit score for further loan requests.
